Exam 3: Interdependence and the Gains From Trade

To produce 100 bushels of wheat, Farmer A requires fewer inputs than does Farmer B. We can conclude that Farmer A has an absolute advantage over Farmer B in producing wheat.

Table 3-38 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-38. Spain should export

Figure 3-20 Canada's Production Possibilities Frontier Mexico's Production Possibilities Frontier -Refer to Figure 3-20. At which of the following prices would both Canada and Mexico gain from trade with each other?

Figure 3-2 Brazil's Production Possibilities Frontier -Refer to Figure 3-2. The fact that the line slopes downward reflects the fact that

An economy can produce at any point on or inside its production possibilities frontier, but it cannot produce at points outside its production possibilities frontier.

An economy's production possibilities frontier is also its consumption possibilities frontier

Table 3-8 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. -Refer to Table 3-8. Which of the following combinations of cheese and bread could Spain produce in 24 hours?

Figure 3-10 Alice and Betty's Production Possibilities in one 8­hour day. Alice's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-10. If Alice produces only lemonade, she can produce

Table 3-36 -Refer to Table 3-36. What is Barbuda's opportunity cost of one towel?

The opportunity cost of an item is

Trade between countries

Table 3-29 Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. -Refer to Table 3-29. Juanita's opportunity cost of programming one cellular phone is testing

For a country producing two goods, the opportunity cost of one good will be the inverse of the opportunity cost of the other good.

Figure 3-22 Alice and Betty's Production Possibilities in one 8­hour day. Alice's Production Possibilities Frontier Betty's Production Possibilities Frontier -Refer to Figure 3-22. What are Alice and Betty's opportunity costs of 1 pitcher of lemonade?

Goods produced abroad and sold domestically are called

Figure 3-16 Hosne's Production Possibilities Frontier Merve's Production Possibilities Frontier -Refer to Figure 3-16. Merve should specialize in the production of

Figure 3-11 The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month. -Refer to Figure 3-11. If the production possibilities frontier shown is for 240 hours of production, then which of the following combinations of ham and cheese could Bonovia produce in 240 hours?

Figure 3-15 Perry's Production Possibilities Frontier Jordan's Production Possibilities Frontier -Refer to Figure 3-15. Suppose Perry is willing to trade 4 poems to Jordan for each novel that Jordan writes and sends to Perry. Which of the following combinations of novels and poems could Jordan then consume, assuming Jordan specializes in novel production and Perry specializes in poem production?

Table 3-18 The following table contains some production possibilities for an economy for a given month. -Refer to Table 3-18. If the production possibilities frontier is bowed outward, then "?" could be

Table 3-27 Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate. -Refer to Table 3-27. Huang has an absolute advantage in the production of